The Finance Ministry stated there is no such thing as a change in the new income tax regime for people for the present fiscal yr and particular person taxpayers can decide out of the regime on the time of submitting their income tax return (ITR).
Clarifying on social media posts claiming sure adjustments in the new tax regime efficient April 1, the Ministry stated, “There is no new change which is coming in from 01.04.2024.”
A modified new income tax regime was rolled out from the monetary yr starting April 1, 2023, for people beneath which the tax charges are “significantly lower”. However, the advantage of varied exemptions and deductions (apart from the usual deduction of ₹50,000 from wage and ₹15,000 from household pension) isn’t accessible, as in the outdated regime.
“New tax regime is the default tax regime. However, taxpayers can choose the tax regime (old or new) that they think is beneficial to them…Option for opting out from the new tax regime is available till filing of return for the AY 2024-25,” the Ministry stated.
Under the new I-T regime, income of as much as ₹3 lakh is exempt from tax. A 5% tax is levied on income between ₹3-6 lakh, 10% for income between ₹6-9 lakh. Income between ₹9-12 lakh and ₹12-15 lakh is topic to fifteen% and 20% tax, respectively. A 30% tax could be relevant on income above ₹15 lakh.
The new tax regime was set as “a default regime” from 2023-24 and the Assessment Year similar to that is AY 2024-25. This may be modified by the taxpayer on the time of submitting the ITR. Eligible individuals with none enterprise income can have the choice to decide on the regime for every monetary yr. So, they will select the new tax regime in one monetary yr and the outdated tax regime in one other yr and vice-versa, the Ministry stated in a press release.
The outdated tax regime which continues to be in power and affords a bunch of deductions and exemptions, exempts income as much as Rs 2.5 lakh from taxes. Income from ₹2.5-5 lakh attracts 5% tax, and 20% for income between ₹5 lakh and ₹10 lakh. A 30% is levied on income above ₹10 lakh.
